tv Fast Money CNBC September 9, 2015 5:00pm-6:01pm EDT
listen really that they have these take or pay agreements, long-term buyers, spain and other countries, asia's a very strong market. but if chanos is right -- and by the way, he notes they're trading at 30 times earnings in 2020, right? it's pretty lofty. >> thank you, kate. thank you guys for being here. that does it for "closing bell." let's get right out to "fast money." "fast money" starts right now. live from the nasdaq marketsite overlooking new york city's times square, i'm melissa lee. our traders on the desk are tim seymour, pete narnlgarrian, karen finerman and guy adami. tonight on "fast," marissa's last stand. the tax-free spinoff of alibaba up in the air could ceo marissa mayer's days in the front office be coming to an end sooner than you i? plus apple just did mcsteve jobs said they'd never do. first to the market sell-off. the celtoff intensifying ending lower than 1%. the dow seeing a 400-point swing. financials and energy the major
culprits. we woke up this morning we had a major rally in japan we had china stimulus on the table and we thought everything was going to come up roses here. >> rallies -- or moves -- i shouldn't say rallies. moves either direction, up, down, predicated on central bank knee-jerk policy response, that's my opinion. never a good thing. whether it goes up or down. that's sort of what we saw today. i'll let pete speak to this. a lot of what you're seeing as volatility increases, it stays at these levels. guys and gals that are short volatility have to buy more when the market goes up. saw it yesterday, to some extent today. then as it goes lower the lower it goes the more they have to sell. i think that's what you're seeing today. being short volatility worked for many years. it's now hurting a lot of folks. and i think it's manifesting itself in some of these crazy swings we're seeing. >> what does this mean for the person at home sitting at the home and thinking oh, maybe the coast is clear here but then suddenly at the end we finish practically at the lows of the
session? >> saying this was going to be a v-shaped recovery was really saying we're in a very different place than back in october because we really are. we do have the fed on deck. i think a lot of what happened today was really actually fear of the fed. i think it's fear of global growth, which is everything that people were scared about two or three weeks ago, but if you look at the treasury bond market i think that's giving you all you need to know. rates are moving higher. there's a number of people that came out today including a couple major house that's said they're going to put their gdp estimates even higher, closer to 4% for the u.s. this is what's bothering people p. it's the fed. it's not china, it's not global growth. it's this market here. >> what's interesting the rollover in financials. pete-i know you've been a bull but the financials have not been acting very well in terms of not being able to hold on to gains. >> no. that's been very tough. and bank of america had an upgrade from goldman sachs and stock got up at 191 and finished the day at 185. certainly the financials have been a place i've been looking for and i've been looking and expecting we're going to see some of these rates actually rise along with the fed as we all talked about, is it going to be september or is that even
going to get pushed out now? we don't know the exact answer. we will find out next week. but to guy's point, volatility, how about the fact that the range of volatility today, we went from 21 1/2 on the low end all the way up over 26 once again. big 20s. expect to see these markets continue to move like we're seeing. 1 1/2, 2% moves. i think that's something you can bank on. look at the lvx and the oil volatility. look at the acceleration of oil today as well. the downward push it had late in the session. again that is correct tells me margins are back in. that's pressuring this market. >> maybe the crude oil trade could have given us a signal. while the markets are sort of flatlining, middling throughout the day we did have wti down at almost 4% at one point. there wasn't any follow-through on stocks till the end. >> that to me is the most significant mover and becomes a barometer for the global growth story, both wti and brent down today. i hated this kind of action. i would much rather see a down day come up. the combination of yesterday and today net in the we're up maybe 20 handles maybe. but i hate that kind of
volatility. i'm hoping it dies down. i think we need to see a fed direction first. >> but it feels different. and if you think about what happened in japan overnight. japan was up 7.7%. that's scary. that to me -- i don't think japan is blowing up. i think japan can finance themselves. people want to talk about their debt to gdp levels. but the equity market is doing a 7.7% move last night. the reversal today tells me there's a lot of capital being reallocated and a lot of capital being taken off the table in terms of some of these carrier trades. japan to me is going to be volatile tonight. it won surprise me to see japan give back a lot of today's gains tonight. >> real quick, in terms of the energy trade and the secondary trade, that stock, it didn't make an all-time high but it made probably close to a 1k3wr5er high. closed unchanged, i know. clearly the tape didn't help. but that's one airline we've talked about for quite some time being in a position where the stock, the 9 tape, clearly a
good tape is going to do well and you saw that a lot. >> let's get to the other story of the day, apple's mega event in san francisco. the company announcing new products and upgrades to its existing lines. cnbc's josh lipton was at the event, has got the highlights. josh? >> well, melissa, this is the future of television. that is how apple was billing its revamped apple tv today. take a listen to how apple's eddie q talked about it on stage. >> the future of tv is apps. apps have changed what we expect from and do on our iphones and ipads. and we think it's going to dot same for television. we're introducing a brand new operating system for your apple tv called tvos. it's based on ios and built for the living room. >> now, this apple tv's going to start at $149, melissa. listen to music, watch movies. also hopefully excite those 11 million registered developers.
apple has sold about 25 million apple tvs. so analysts don't think this would have any kind of big financial impact, at least in the near term. but listen, if you can hook users into the apple tv, maybe it will be easier to get them hooked on that much talked about web tv service. for investors clear l. the focus is on the iphone. still represents about 6 30ers of this company's sales. apple today unveiling the 6s and 6s plus. tim cook said while the phones may look familiar apple has changed everything, by that he means the new phones are faster, they have a pressure-sensitive display, an improved camera that can shoot q4 v4k video. are the new phones going to help grow iphone units in december and in 2016? and finally, melissa, apple making a bigger push into the enterprise with the new ipad pro. a 1k347b display. a keyboard. a stylus. also a range of companies on stage with cook including
microsoft and adobe. talking about how their apps will work with this new device. in the last quarter apple did say ipad shipments fell about 20% but the hope is this ipad pro can move more of those devices into the workplace. melissa, back to you. >> all right. thank you very much, josh lipton. let's talk about apple and the price action today because it was curious. not only did apple lag in the three months leading up to the event when it normally does pretty well but it also underperformed the broader markets in today's session. what should we make of that? >> listen to them today. they're trying to be sensational. the future of tv. come on. this is not where this is at right now. it's going to be 3.3% of revenues if they go to where we think they are in 2016. apple is not broken, though. it's just that the comps are -- 2016 iphone sales will probably be 6%, 7% p i think that will be very, very good. it won't be something people can go crazy about. we're waiting for the next thing from apple. in the meantime they're playing this for a reasonable foundation. a company that is absolutely the best run in the world.
>> in terms of the phone that's what we really care about. are we going to have the massive upgrade cycle we saw with the 6? i would say probably not. >> i'm going to say probably so. and the reason i'm going to -- >> just as big as the 5 to the 6 upgrade cycle. >> we've only had about a third of those that have gone up have moved to the 6 and 6 plus. now all of a sudden you've got the 6s, the 6s plus and you've got all the more capability out of the phone, the 12 megapixel camera, the a9 processor. i think the ipad pro, though, melissa, that to me is what the game changer was of today. when you look at what that was capable of doing it will replace the ipad. the problem with the ipad, once we got the larger phone it makes the ipad that much more irrelevant. now suddenly the relevance of the ipad becomes something once again in the ipad pro. into the enterprise. i think that could be huge in terms of apple going forward. 799 price target, that's big as well. >> for more on apple's big announcements let's bring in brian blair, co-founder of grays
peak capital. brian was at the event in san francisco. brian, i wanted to start off with one of the announcements surrounding the ipad pro and that's the introduction of the apple pencil, which is a stylus essentially. here's what steve jobs said back in 2007 when he introduced the first iphone. >> who wants a stylus? you have to get them and put them away and you lose them. yuck. nobody wants a stylus. so let's not use a stylus. >> arntly, now people want styluses. has apple finally -- not just the stylus but also steve jobs didn't want to go to the larger format phone. they went to the larger format phone. so has apple given up the ghost of jobs? >> you know what they're doing is they're reacting to what consumers want. they make guesses every now and then. he made a guess about a stylus. at one point he also said they shouldn't do a 7-inch tablet. they did the 7-inch tablet with the ipad mini. larger screen iphone. what's great about apple is they're willing to listen to the consumer. several examples of that today, one of them being the stylus.
it's going to be necessary for them if they want to try to grow this market. ipad units have been in decline for over a year now. this is a way for them as was mentioned earlier to grow into the enterprise and grow their market. >> what i found was bizarre about the presentation, specifically about the ipad pro and the use of the stylus is even though it's meant for the professional they had somebody drawing a hummingbird on the screen. it was all sorts of non-professional uses to sell the ipad pro. there seems to be a disconnect in terms of marketing this thing out of the gate. >> well, i think -- i don't think it would be very interesting if they showed people in front of a grocery store using it to write down groceries. that's not as appealing. i think by showing the artist side it shows that you can actually do a lot of very fine movement with it. when i used it just about an hour ago i was very impressed. it recognized whether you were pressing into it lightly. it really did function like a pen and a pad of paper more than i've seen in any other kind of tablet-based devices from samsung and others. they want to show it in a sexy
manner. that's@artistry is there. >> let's talk about the phone now. how big do you think the upgrade cycle will be compared to the upgrade cycle we saw from the 5 to the 6? >> it will not be as big. the movement to two larger screen devices last year is why we saw that massive trajectory where they sold 74.4 million iphones. these upgrades are meaningful. they're important. as was mentioned earlier, the 12 megapixel camera is great. the 3-d touch enhances the interface quite a bit. you but i don't think we're going to see them beat last year's 74.4 million unit number. it's because these improvements are -- they're small. they're iterative. these are evolutionary. and these are not going to drive as many people i think to go out and, as we saw last december quarter. as of right now. >> okay. brian, we're going to leave it there. thanks so much. brian blair, grays peak capital. >> i agree with everything pete said. i thought the ipad was fantastic
and it was i thought a big change. you talk about did it have business functions? one thing also, they have microsoft actually at an apple event presenting their software there. that adobe software that did the magazine layout i thought was fantastic. that seemed really interesting to me. i think we are going to see big phone upgrades. i like it. originally when they said something new, the apple pencil, i thought it was a "saturday night live." i thought what are they going to come out with next, a wheel and fire? but actually, when you see how sensitive the stylus is, you see how sensitive the ipad is, that was interesting to me. there was a bad day in the market. the stock was down too. i don't think that tells us anything. >> we had paul hickey from bespoke on yesterday. >> love paul hickey. >> the setup to the event is different because apple was down into the event on three months while on average it's up something like 25%. so does it set up for apple to actually close the gap in underperformance at this point? >> close the gap in underperformance.
yes, it does. and i think the 103.5 level back out the low we saw on august 24th and that 103 1/2 level we traded down to a couple times on the 24th and 25th i think that's your line in the sand. to your question, can it close the underperformance toward the broader market? the answer is yes. quickly. something's got to happen in qualcomm soon. if you look, that stock continues ton be able to get out of its own way. you're going to hear some noise from somebody at some point. >> starboard. >> at some point. and i think the stock becomes compelling. if for no other reason than somebody's going to open their mouth. >> coming up next gopro getting crushed. we'll tell you what was behind today's brutal midday 10% sell-off and if you should be buying right now. plus will yahoo! engage in the ultimate game of chicken with the irs and push ahead with the alibaba spinoff? the answer could determine the fate of marissa mayer. and later we've got five ways to profit from apple's big day without having to buy a single share of apple's stock. we'll tell you about that on a very busy "fast money." back after this. equals great rates.
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shares worth of volume. you can see in the chart right there the company's reporting better than expected fourth quarter revenues and profits. palo alto's first quarter forecast also came in well above analysts' estimates as companies and governments are spending more, guess what, to protect their computer networks amidst all of these more sophisticated cyber attacks. now, remember, the shares are up also big again this year. they're up about 35% year to date, up about 8 350e6rs the course of the past 12 months. so very big moves for palo alto networks in the after hours trade. >> thank you, dom chu. surprisingly i just pulled a chart up. it's been a relative outperformer even with the turmoil. >> i think it went from 200 to 165. at 100 times forward earnings. it's not a cheap stock by any stretch. but you look at billing growth year over year, it's close to 70% billings growth year over year with improving operating margins now north of 14%. does it deserve that valuation? i think it does because i still think they're the best company
in the hottest space. i think if the tape just sort of flatlines for us we retest the $200 level. >> rough day for natural gas play cheniere energy kicking off our top trades tonight. the stock falling by more than 3% after noted short seller jim chanos his latest short position earlier today on cnbc. >> with the stock at 30 times 2020 earnings with the up side coming from a glutted market, we think the risk-reward on this given where other lng plays are in australia and elsewhere is just completely out of whack. >> is we decide to take a look back at some of chanos's other short positions and how those stocks have fared since. on august 21st he announced a short on solar city. since then the stock is up 2. 5%. in 2013 he announced his caterpillar short. since then the stock is down 10% but only after an initial huge pop right after he took the short position.
and back on july 18th of 2012 chanos announced his hpq short. since then the stock is up 45%. karen. >> this is a really controversial one, lng. the ticker for cheniere. but you know, one of the things he didn't say is'll it's really about how much lng is looking to go through the system, not the price. but also this long-term contract issue. before you dive in and just follow chanos, who is a brilliant short investor, you should know, one should know that there are some brilliant investors on the other side. carl obviously is the most high-profile, but bal post-seth clarman, tremendously successful investor. lone pine, they're great investors. viking level and blue ridge. john griffin. that is a handful of outstanding investors. i believe also gso might have a preferred play in there. so there are some very, very smart hands on the other side of the trade. all that having been said, i wouldn't touch it. i'm afraid of it now both ways. >> why are you afraid of it now versus before?
>> i wouldn't have been in it before. sa ryf suki, he pays himself a ridiculous amount of money, which is part of what carl was pissed about but he's a smart guy, he's done? great things. >> gopro, the stock getting absolutely crushed falling more than 10% to a new low after initially getting a small pop on the back of an apple mention that it would be featured in the latest rounds of apple's apps. guy. >> then huh an analyst talking down mobileeye saying it's worse than ambarella which knocked it down which knocked gopro down. tim has been steadfast in his dislike for the stock, not necessarily the product. i thought that last quarter june into july was an outstanding quarter and stock traded in kind. pushed up near 6 bucks. now it's starting to show its spots. all i can say is dead wrong and the guy to the left, that's me, i don't know necessarily what you do with it here. the only good news is it traded a huge volume day and it was down 10%.
outside of that i've got nothing good to say. >> best thing about this stock is the delta on the short interest has changed enough that "three's company" significantly less short interest in the stock than there was six months ago, obviously. right? you're getting to a place where the valuation -- this is a hardware company. it's not a media company. it's a great hardware company but it should be priced as a hardware company. at the ipo price it was reasonably interesting. let's wait and see more growth numbers. the holiday season, they're going to have very good numbers. i would not be confused by that. i think it's a case where these guys have sold themselves as being more than they are and that's what's been dangerous about owning the stock. i think 24 is where the stock can go. >> how do you think this sets up into the holiday? >> when you look at the revenue growth numbers they're absolutely spectacular. >> yeah. >> and going into the holiday to tim's point i think those numbers will be huge. i think when you look at the stock right now in my opinion looking at it if i'm somebody way lot of cash on the balance and we talked about a stock earlier, maybe an apple, why wouldn't this be an incredible acquisition? at these levels. at $33 a share. you give them a premium of
something. this fits i think well into the apple ecosystem. >> still ahead, facebook making a big push to make money from instagram. we'll tell what you it could mean for facebook shares, which actually closed higher. you're watching cnbc, first in business. meantime, this is what's coming up on "fast." >> could this person's days in the c suite be coming to a close? >> what i would say, it's not me. >> well, marissa, it just might be. we'll hear from a top analyst who says mayer may have just been dealt her biggest black eye at the helm yet. plus, five ways to profit off the apple event without actually buying apple stock. much more "fast money" up next. ♪ with the new chase freedom mobile app, you can simply redeem, pay, and go.
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baba shares getting a boost today despite two analyst price target cuts. the move comes on the back of the e-commerce giant announcing the volume of its e-commerce transagencies will be lower than expected. could this finally be a floor for the stock? joseph skully is cantor fitzgera fitzgerald's global head of internet research. great to speak with you. >> thanks, melissa. >> what do you think was behind the surge in alibaba shares? was it the notion china would come and stimulate the economy? >> i think it was more the fact that the stock has lost so much. the stock is almost down 50%
from its high. this is a company that whether we want it or not basically dominates e-commerce. you look at e-commerce in china. whether it's growing 6%, 7% or 10% there's very, very low penetration of e-commerce. the retail infrastructure in china is very inadequate and yet baba owns over 80% of the market share. so clearly longer term, and this is where longer-term plain vanilla investors are going to come in, they want to own it because they might have missed it at the ipo, they did not want to buy it over 100. i think it has more to do with that. valuation is trading below one-time peg. i think at the close yesterday it was trading around 0.8-00.9 times peg. for a market leader that sounds interesting. >> i want to switch gears and talk about yahoo!. what do you think could be the best case scenario for yahoo! given the irs's decision ton give a ruling essentially? >> well, so it is a black eye for marissa mayer. and her team.
they had a lot riding on it. so the best case is for them to get a favorable opinion from their -- from scadden arps, their counsel, to go ahead with it and hope the irs doesn't come after them afterwards. if that happens, then they've just saved $10 billion to shareholders. but there is a huge amount of uncertainty around that. the other probably more likely scenario is for the baba shares to start working back up and then as they do that will translate into just a higher value for yahoo! since yahoo! owns 15% of that company. >> youssef, we're going to leave it there. youssef squali of cantor fitzgerald. it's interesting because it sounds like he's saying the best case scenario for yahoo! is hope. hope that it's going to work out. as an investor is that enough for you? >> again, the irs ruling wasn't that this was not something they were -- they're deferring their
decision till after yahoo! does the transaction. yahoo!'s going to have to pay a lot for a legal opinion on this. i don't mean 245id be paling for it. in other words, it's going to take a lot of work and a law firm will have to be very cautious to get out there on this. if you look at yahoo! stock and the underlying valuation, we went through this yesterday and you're going to have to do your own work, folks. but if you look and price yahoo! based upon the current share price of baba, yahoo! japan taxed at 39% and the core business trading at 5 1/2 times ebidta you've got a stock worth 22, $23. for a stock that's beaten down by baba and we just heard why i think baba's worth owning i'm long the stock. clearly i'm long both of these names. it's not been a pleasant time. but the valuation of yahoo! looks very interesting. >> coming up next, today may have been all about apple's new upgrades, but we've got five other ways to profit from apple's big day without ever even having to buy a single share of apple. plus what's next when the old adage sell in may and go away
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close. the dow fell about 1240 points. a 400-point swing. the dow and s&p 500 are on track with their biggest quarterly losses in four years. here's what's coming up in the second half of "fast money." if you sold in may and went away you avoided a major dip in stocks. what should you do now? is it time to get back in? all the details later. netflix shares soaring 5% even as the rest of the market fell today. is the bite back in fang? the traders will weigh in. let's start out with apple announcing a slew of new products, an upgrade at its event. and there's more ways to profit from it than just buying apple. dom chu's got the details at headquarters. dom? >> our investoring team at cnbc pro reached out to a number of different traders and analysts on wall street to see how they would play the stock market given what just happened, what just transpired at that big apple event today. and hear how a few of those ideas came to fruition in terms of trade. so first off, definitely interesting to see that representatives from different companies came up to show their products work with all those apple devices.
one of them was adobe. some pros looking at buying adobe stock on the heels of that presentation, the thinking being that adobe's one of the companies that's really getting behind the new ipad pro and developing applications to help turn it into a real pc replacement. others are taking a look at buying video game publishers like electronic arts and activision. the new apple tv release and iphone upgrades cowan leash a wave of console-quality gaming capabilities. traders looking at those booms to game development sales but not just about buying. some analysts also take a more bearish view on competitors who make pcs, other devices. bigger pc makers like hp could take a hit because of shifting product preferences. is the new ipad pro a pc killer? those are just a few of the cnbc pro plays on the apple headlines today. for more on the story and other ways to play it subscribers go to cnbc.com/pro. there are more trades up there, melissa. back to you guys. >> thank you, dom chu. pete najarian, where would you go? or would you go off script from these names? >> go off script a little bit and i'd actually stick with apple itself. >> what?
>> why not go with -- go for the animal itself. but if i'm going to go somewhere else -- >> let's say you have too much apple in your portfolio. >> if you've got too much apple you won't want that exposure, one of the names dom didn't talk about, though, is a lot of these chip companies that are absolutely reliant on apple. some of them sold off despite the fact that apple continues to sell all the product they do. cirrus logic, ahavingo. there are different names in the world i'd go to. >> nice pocket square, by the way. >> chew on this. >> they report on september 17th. mere hop, skip and a jump from today. what typically happens when they report? there's a flush to the down side. three days to four days later the stock is making a new all-time high. i say to you wait until the 17th, look for the flush back down to 75. i think you're going to get it. a couple analysts upgrading the stock over the last couple weeks. adbe sticks out to me like that pocket square that my man d-chu was just wearing. >> i know you don't traffic often in any of these names, karen, but in terms of the features that apple unveiled which do you like the best so
that maybe some of these guys can connect a trade to it? >> i thought the games on the phone look phenomenal. and i'm not a -- >> gaming person. >> no, i'm not a gaming person but it looked like an incredible experience. there's one. a dollar of revenue for one of those guys will trade higher than that same dollar of revenue at apple. >> absolutely. >> right. so for apple -- it's a $35 billion gaming console market. what does mean for apple? i'm not so sure. what's it mean for ea? it's in the game, baby. for these guys you looked at their last quarter numbers that came out in july valuationwise the stock's pretty interesting. it had been beaten up. the hp argument let's face, it we've been talking about the demise of the pc forever for these guys. you can't tell me that's new news. i feel pretty good about the adobe call, don't like the hp call. nice pocket square. >> netflix topping the tape up more than 4%. the move comes on the back of its announcement the company will move into south korea, singapore, hong kong and taiwan early next year. and of course we've been noticing the underperformance
relative to the rest of the markets of late, guy. but here it is. a standout. >> 95 the line in the sand. mark cuban talked about it a couple mondays ago i think. the days starting to meld together. but 95 was a 50% retracement. we talked about that a few weeks ago. i think you own the stock. i don't think the netflix story's changed at all. the international growth is still outstanding. yes, valuation is a concern. but i don't think it can be replicated in the near future. five years from now we probably won't be talking about it. five months from now we will. again, tape stays benign here. i think netflix goes higher. >> how are you feeling about netflix? >> i tliek as well and the growth internationally. they continue to expand. in the u.s. there might be some concerns in terms of growth. subscribers have been strong. can they continue to be strong in that regard? but i think this international expansion, we've talked about it and talked about it. as this continues and as this rollout, this is a company that continues to grow to the up side. 90 to 9 5 to guy's point, any opportunity in those levels that's a buy for netflix. >> i'd go the other way. i agree, 95, 96 is the level to
trade off. if we're talking about apple and the disruptor elements of today's meeting. if anything, apple tv for netflix poses a big problem. granted, that could be the conduit in which you get to your netflix. >> that's my conduit. >> to the extent a lot of people -- they're talking about apps and people going around it almost and going straight through there, it's interesting. tons of competition. a valuation that doesn't make sense in a market that's very scared of valuation. >> coming up if you sold in may and headed out for the summer you're feeling pretty good, but what should you be buying right now? we'll reveal the three best bets in the market to make you money until the next may. plus some savvy traders replacing huge bets on one big pharma stocks. we'll tell you that name when "fast money" returns.
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call now to request your free decision guide. and learn more about the kinds of plans that will be here for you now - and down the road. i have a lifetime of experience. so i know how important that is. earnings alert on two names moving in the after hours. let's get to dom in the newsroom. hey, dom. >> so melissa, shares of krispy kreme donuts sinking in the afterhours trade as the donut maker cut its giebs for its current quarter and the current year. last quarter's results came in weaker than expected due to weak sales in its packaged goods category here. also negative derivatives. you know, those futures and
options impacts. shares down about 25% so far this year. you can see those trades there happening. also cloud storage provider box providing a better than expected rise in their quarterly sales. they also upped their full-year sales forecast for the second time. up about 45% from the same time a year ago. and of course be sure to tune in. "closing bell" tomorrow. box co-founder and ceo aaron levy will be joining kelly and bill in a first on cnbc interview to discuss just those earnings numbers and what the future holds for box, melissa. back over to you guys. >> thank you, dom chu. with the cute pocket square. pick your poison. box or donuts? tim. >> well, if i look at box, i'd say these numbers are very good. ultimately the billings are what people look at. the stock had a huge move down, today went back through the 20. 17 is a level on the stock i would be cautious of. it's a no-brainer when given that choice. >> huge short interest in box. aaron levee's going to be on with jim tomorrow -- he's going
to be on somewhere tomorrow. >> "closing bell" 3:00. >> he can get up to 16, 17 just on the short covering rally alone but i do think the stock is at a pretty significant down trend going back quite some time. >> nice strong guidance as well on this stock. >> say it. >> i'm just saying. >> what? >> giddy up. >> moving on, we all know the infamous wall street saying sell in may and go away. you know what? it's worked like a charm this year. the sthp &p is down 6%. dow down nearly 8% since may. but if you did sell in may what now? editor in chief of the stock almanac. we should emphasize if you were lucky enough to do, i'm sure not many people were but let's say you did. >> do it every year. >> seasonally, what should you be buying right now? >> right now we're looking at biotech and tech. we're always in the probabilities fund, protx, which is based upon the almanac, so we go in and out on the s&p on a regular basis. but coming up in october all the sectors coming into the season.
consumers, discretionary. banking. you name it. and all the stocks. best time of the year to buy stocks is october. and that's what we're looking at going forward, getting ready, waiting for our buy signal. >> when you say best time of the year to buy stocks is in october-s that the markets overall and then these sectors even more specifically so they outperform an already -- >> yeah. >> -- a market that's turning higher? >> you've got the biotech sector's one of the strongest sectors and our favorite sectors for the future. traded last year for about october 21st into march. it's back down right around our buy limit here-a round 350, a little bit below, late-day sell-off. tech stocks end of october great day to buy them. it's a little early. we're being patient, being cautious. end of september's really weak. the week after triple witching has been up only four times in the last 25 years for s&p. and the third quarter window dressing tends to knock things down. we're concerned going into the end of september. we're being patient here. >> okay. you know, it's funny when you take a look at tech and consumer discretionary it's hard to make
sense to buy them into your end. for biotech can you figure out why that seasonality pattern would exist? >> well, there's a whole conference schedule. they come out with new drugs. there's also the cash flows that come into the market in the fourth quarter and the first quarter. anticipation of earnings and revenues and the first quarter that everyone gets in front of. biotech's one of the strongest sectors out there, has been for a bunch of years. it's a great opportunity to pick it up on this dip, on the sell-off right here. >> as for the season altd, do these patterns hold up more strongly if the markets did x, y and z prior to this period? >> it's always a better buying opportunity having a nice sell-off in the may through october period. it was great last year. we had the mid september to mid october swoon and that was a great buying opportunity. >> we're going to leave it there. thanks very much. jeff hirsch, stock traders almanac. >> every time tim says prasm you make him -- he said mac d buy
signal you didn't even flinch. moving average convergence divergence for the folks playing at home. trade school. macd. to his point about 9 october sell, there's a retest 1820. i think it may in terms of the s&p, buy it there, or have we seen the low already? that's what makes markets. consumer discretionary and biotech, you own both of those. >> i hate this kind of thing but the xpi is splitting tomorrow. 3 for 1. no reason at all to buy the stock, and yet people do. but i like discretionary for the reason you talked about, hopefully this time of year has been a historically good time to own. >> i think you have to really be careful about october when you're buying. in fact, if you look at the last couple octobers, october's been the most volatile month until it
turned. 2011 is what i think this all looks like. i think august through october. and markets probably not changing until october. we've got a lot of stuff to work through here. sell in may, go away and come back at the end of october. i don't really understand that. i mean, that's not that easy to do. and i don't think most people trade like that. >> basically saying it's all baloney. >> active marnlgz -- >> i don't know what to do with that. >> absolutely. the one thing he mentioned was biotech. today jefferies talked about biotech as well and their buys they put out were biogen and celge celgene. i like some of these names. wealth management guys are involved in celgene. the great opportunity i think and guy keeps talking about volatility, he's been right, high volatility, we're talking now back above 26 today. when you've got higher volatility and you're buying some of these names that you like after they've been beaten down, you can use this volatility to sell these up side calls, create great opportunities. you're getting far more premium than you normally would be getting. that's exactly what some of the guys are doing today for us.
giddy up. >> giddy up. >> dividend, too. throw that one out. see that. >> trade school. go easy here. >> announcing a major change that could mean big bucks for facebook. we'll give you all the details. and tomorrow run, do not walk to "squawk box." they will have an exclusive conversation with appaloosa manager founder david tepper. what september surprise could he have up his sleeve for investors tomorrow? find out. that is tomorrow 8:00 a.m. eastern time only on "squawk box." you're watching cnbc, first in business worldwide. care of my heart. that's why i take meta. meta is clinically proven to help lower cholesterol. try meta today. and for a tasty heart healthy snack, try a meta health bar.
facebook looking to finally monetize instagram and its more than 300 million active users. julia boorstin's got more on this in l.a. julia. >> instagram is opening up its sell service ad platform rolling out ads to any advertiser all over the world and introducing some new formats and tools. advertisers will be able to buy 30-second video ads as well as photo ads, plus it's offering action buttons to encourage customers to shop now or download an app. instagram's also making it easy to buy and measure ads' impact across its app as well as facebook. plus for advertisers looking to quickly drive mass awareness for, say, a new movie product, a new movie opening or a product that's launching, instagram is introducing a new premium tool
called marquee. facebook shares closing higher today on confidence that instagram will be able to tap into growing demand for both mobile and video ads and compete with the likes of snapchat. e-marketer projects instagram will generate about $600 million in ad revenue this year, $1.5 billion next year, and $2.8 billion in ad revenue in 2017. it certainly makes facebook's acquisition of instagram for $1 billion in 2012 seem like a wise purchase. now, as for the question of whether a surge of new ads will annoy users, instagram points to the fact that it spent nearly two years testing and tweaking ad formats. instagram's head of business says ads have a very specific measurable impact on brand awareness and also on driving actions like app downloads. they also tell me that time testing all of these ads means they're very confident that they won't annoy users. melissa? >> julia, is it your sense that analysts have not put anything
in their models for an instagram revenue line? and so therefore estimates would have to come up? >> well, i think a lot of them have been expecting instagramt to kick in by next year. i would have to go book and look at the various analysts' estimates. but instagram is one example of a lever facebook has yet to pull. nour we now we're going to see them start to pull it. we'll see if those e-marketer estimates are accurate, but it seems like the potential is huge. and analysts have been optimistic about the bigger picture potential of stain gram as well as some of their other apps like messenger and what's app which they haven't monetized. >> julia boorstin in los angeles for us. i guess i asked that question because you want to know whether or not -- yes, it was expected but how expected was it and will estimates have to come -- >> i think they have come up. >> i think you have a much better sense of what the impact could be at this point. >> what's app has 900 million users now. with instagram they stalled.
julia just talked about it. you look at the last eight, nine quarters for facebook, each one has been better than the prior one and i think the next one's going to be the best ever. it has not traded horribly in all this turmoil. and i think it's going to push toward 100 bucks. 35 times forward earnings. i don't think it's that ridiculously expensive. i still think it's facebook world. it goes higher from here. >> karen, yesterday you said you felt it would trade up to 100 but you couldn't get your head around the valuation of it. >> right. still if you look at on a cash flow basis, which is how i look at it, it's wildly expensive. but the growth is there. and if you look at the fang stocks, they actually are hanging in well today. >> is that garp? growth at a reasonable price. where do you trade it -- >> growth at an expensive price. >> never heard of that. >> rolls right off the tongue. >> i think it goes to 100. >> i think they continue to underpromise and overdeliver. and i think instagram is going to be a perfect case of that. who knows what people modeled
in? in a couple years they will be 10% of their ad and their mobile revenue. and that's very, very significant. i like it. >> ad expansion, that's huge. and video, we all know that's the place to be right now. that's what they've got. 300 million monthly users. they've got everything working in their direction. great acquisition. this is why i continue to pound the table. apple needs to get more aggressive in some of their acquisition strategies. they've got to do it preipo. that's one of the mistakes they've made. >> shifting gears here, health care is one of the worst-performing s&p sectors in the past month but some traders are seeing opportunity in the space and one name in particular. mike kuo with the name options traders are buzzing about. >> that tha name is bristol-myers. it's interesting we saw three times the daily average call volume in the name today. where that was concentrated in the october 62 1/2 calls. we know it was opening because over 12,000 of these traded with only 1800 open interest. and if we take a look at implied volatility, which is basically the price of options, we saw it's rising throughout the day. looks like a lot of the activity
toward the end of the day were likely buyers who were betting bristol-myers is going to be up 7-plus percent by october 16th, which is when these options expire. >> i'm sure pete najarian here, sitting to my right, saw -- >> mike kuo, you're the best, brother. >> easy. >> love this name. everybody says, well, it's bristol-myers and all the rest of that stuff -- this company has been oversold i think from when it had made that big run and this call buying i think will turn out to show a lot about where it company's going by late october. >> our thanks to mike kuo out in austin. for more expectation ppgs check out the full show 350rks p.m. eastern time on fridays. well, the traders will show you what they're watching after the break. more "fast money" straight ahead. i'm here at the td ameritrade trader offices. ahh... steve, other than making me move stuff, what are you working on? let me show you. okay. our thinkorswim trading platform aggregates all the options data you need in one place that lets you visualize that information
for any options series. okay, cool. hang on a second. you can even see the anticipated range of a stock expecting earnings. impressive... what's up, tim? for all the confidence you need. td ameritrade. you got this. good. very good. you see something moving off the shelves and your first thought is to investigate the company.
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he's doing everything right... for the most part. no pain, no gain. you are a beast, ted. my name is watson. how can i help you? did we just see what's known as a successful retest of the lows? or is this just the calm before the next storm? we've seen this pattern occur time and again with bottoms in the stock market. >> "mad money," 6:00 p.m. eastern on cnbc. and finally, fast but not least, how would you spend $50,000? invest it in stocks or buy a two-headed snake? the owner of the venice beach freak show just shelled out that princely sum for this two-headed albino serpent named medusa proving two heads are certainly more expensive at least than one. >> can you imagine what else is
at the venice beach freak show? >> i don't want to imagine, that actually. be sure to tune in to "squawk on the street" at 9:00 a.m. eastern time. ge chairman and ceo jeff immelt will join the squawk family live in a cnbc exclusive. must-see tv. time for the final trade. let's go around the horn. we'll start off with a special guest here, karen finerman's son jack. >> i'm proud of you, melissa. i want to talk about united rentals. they made some positive statements at an rbc conference. >> all right. >> they did. >> i tell you what. freak shows are also -- think of oil, think of the commodities market. watch oil tomorrow because today i think gave you some clues. watch the energy stocks because a lot of them are trading fine in this volatility. >> pete. >> i've been to the venice beach freak show. >> no, you haven't. >> yes, i have. >> thanks a lot. >> you know what's a freak show? bristol-myers. it's going higher. >> good-looking kid that jack. looks just like his father.
yahoo!. does it hold the gains we saw today? but all roads lead to google no matter what. >> i'm melissa lee. see you tomorrow at 5:00 for more "fast money." meantime, do not go my mission is simple. to make you money. i'm here to level the playing field for all investors. "mad money" starts now. i'm cramer. welcome to cramerica. my job is not just to entertain you but to educate you. call me at 1-800-743-cnbc or of course tweet me @jimcramer. i've gotten older. you probably can't tell that because we have excellent makeup people who daily